Importing From India to Sri Lanka

Here's a number from our own trade-data work that we didn't expect. In 2019 India supplied 40.6% of Sri Lanka's ceramic imports. By 2025 it supplied 61.1% (our analysis of UN Comtrade, HS 69, queried 23 September 2026). Over those years the tiles and sanitaryware coming out of Morbi in Gujarat pushed most of the competition off Sri Lankan shelves.

That's the Sri Lankan buyer's position in a nutshell. India already supplies about a fifth of everything your country imports (20.43% in 2025, same source), it's the top supplier of medicines and of cotton yarn and fabric, and you have the oldest free trade agreement India has with anyone. So this page isn't about whether to buy from India. It's about the three things that still catch Sri Lankan importers - the agreement you pick, the negative list, and the levies that a zero duty leaves standing. One caveat - we haven't read Sri Lanka's full tariff guide line by line, so the rate on your product is still a broker question.

Last researched 28 September 2026 · Next review 24 November 2026 · Written by SourcingFrom

The decision in brief is in the playbook: Exporting and trade → /india/#trade. The shared South Asian rules are on the SAFTA bloc page, and APTA's value rule is on APTA. Why Colombo matters to buyers who never import into Sri Lanka is on the SAFTA page too.

1. Start With the ISFTA, Then Check the Negative List

You can claim under three agreements, and for most lines the India-Sri Lanka FTA is the one to start with. It has run since 2000, and your supplier has very likely issued its certificate before. Sri Lanka's Department of Commerce sums up the origin rule as 35% domestic value addition on the FOB price, a change of tariff heading at the four-digit level, the last process in the exporting country and direct consignment (Department of Commerce, Sri Lanka, ISFTA (opens in a new tab)).

The catch is the negative list. Sri Lanka kept 1,180 tariff lines out of the ISFTA altogether (same source), so on those lines an ISFTA certificate buys you nothing. What do you do then? Check whether the line has a SAFTA or APTA concession instead, because the lists aren't the same. If none of the three covers it then you pay the general rate, and the supplier's "FTA price" means nothing.

The ISFTA also lets Indian and Sri Lankan content count together, once at least 25% of value is added in the exporting country and 35% in aggregate (ISFTA text, commerce.gov.in (opens in a new tab)). If you make garments in Sri Lanka from Indian fabric, that's the rule your costing rests on.

2. Zero Duty Isn't Zero at the Border

A preference cuts customs duty. It doesn't touch the Ports and Airports Development Levy (PAL) or the CESS as far as we could establish, and we couldn't find an official line saying ISFTA goods are exempt from either. That matters because they're big. The World Bank reckons phasing them out would cut Sri Lanka's simple average import duty by about 9 percentage points, and the government plans to remove both by 2029 (The Morning, 21 April 2026 (opens in a new tab), Reported). VAT at 18% applies on top (Inland Revenue Department, VAT (opens in a new tab)).

So when a supplier tells you the goods land "duty free" under the ISFTA, cost the levies anyway and ask your broker to confirm what applies to your line. We'd rather you were pleasantly surprised.

3. Import Rules Here Move With the Dollar

Sri Lanka has a habit most of our other markets don't. When foreign exchange runs short, it restricts imports, and when it recovers, it reopens them with a surcharge. Vehicles are the clearest case - banned from 2020 and reopened on 1 February 2025 with a 50% surcharge on customs duty for personal vehicles (News On AIR, 1 February 2025 (opens in a new tab)). Vehicles are also the biggest chapter Sri Lanka buys from India (12.0% of imports from India in 2025, our Comtrade analysis).

The lesson travels to any category. Before a big order, check the latest gazette for your line and not last year's, because a restriction or surcharge can arrive faster than your production run.

4. The Wider Deal Is Still Parked

A broader agreement, the ETCA, has had 14 negotiating rounds, the last in Colombo from 24 to 26 July 2024, and nothing is signed (High Commission of India, Colombo (opens in a new tab)). Don't wait for it. Everything on this page runs on the agreements already in force.

5. Back to the Tiles

Morbi's jump to 61% happened under the same ISFTA every Sri Lankan importer can use. Most of that trade is ordinary - a buyer in Colombo, a factory in Gujarat, a certificate from DGFT's eCoO 2.0 platform (PIB on eCoO 2.0 (opens in a new tab)) and a ship that takes days, not weeks. Get the agreement right, check the negative list and cost the levies, and India is about as easy a source as you'll find. If you'd like someone to chase the certificate and book the shipment, SourcingSync (opens in a new tab) can do that.

Next Step

Every Indian agreement is on India's trade agreements.